I used to work for a company that boasted that 50% of employees worked remotely. The driving force was that the company, Sun Microsystems, was headquartered in Silicon Valley. Because housing was so expensive, many employees had to live far away in distant suburbs and face commutes of four hours PER DAY.

It made perfect sense to then allow employees to work from a home office. Not only could employees save money by living in lower cost areas, but the company could get rid of expensive real estate. Everyone wins.

The situation with high cost housing is now pretty much standard in the largest cities. Boston, San Francisco, Vancouver, and many others have housing costs 5 to 10 times higher than small cities. Living in Boston, I watch real estate shows where people buy houses for 1/20th of what they would cost in my town and drool. Apparently in Waco I could get a house for about half of what a down payment in Boston would cost. Holy cow!

So if the cost of living is so much cheaper across the US, why don't companies just hire people in smaller towns at half the cost and allow them to work remotely? If we can outsource call centers and coding jobs to India, then surely we could outsource finance, audit and operations to Boise or Buffalo.

But we are not. Sure, some companies have opened offices in low cost centers. Fidelity Investments has shifted some departments to Dallas, Albuquerque and Charlotte. But it still has a large workforce in Boston. Why isn't everyone shifting to the remote work paradigm.

One of a few things must be true. Either working remotely does not actually work, or companies are incapable of making this change in spite of wanting to. Of course, it is possible that they could, and sort of want to, but still cling to the belief that people have to work face to face.

If it were possible to have much of the workforce work from a distance, someone would be doing it and undercutting the market. The marketplace has a tendency to reward low cost providers. In a service economy, the #1 cost is people, so this would be the primary method of cutting costs.

That this is not happen would indicate that having workers spread out, working from home simply is not a workable solution.

Or possibly the opportunity for someone to start doing this and destroy their competition is just hanging out there.

What do financial services and 19th century Chicago meat packing have in common? The similarities between clean, tech driven financial companies and meat processing plants do not readily come to mind, but they exist. the need for innovation is common to all businesses.

Like today, the early 19th century was a time of great innovation - only in food production and transportation instead of information. In the early 1800's, the mass production of meat near Chicago's rail yards was rapidly growing. Millions of animals were shipped to the slaughter houses where they were butchered and processed and shipped back out on refrigerated cars, a new invention that was revolutionizing the food industry.

Out of these slaughterhouses flowed a massive amount of waste. One of the main channels of waste was a small river in named "Bubbly Creek." Bubbly creek became synonymous with the environmental abuses of the time when it was described by Upton Sinclair in his exposes. The river was so named because assorted effluvia bubbled and hissed in a disgusting morass of offal as the animal matter decayed.

Into this creek stepped (quite literally, wearing rubber boots) inventor and plant owner Peter Cooper. Cooper, who had invented a steam engine, owned a processing plant on the creek. Being an eternally curious an inventive person, Cooper would often stand in the creek to see what was being discarded from the slaughterhouses. His reasoning was that if something that was discarded could be used to create a product for which people would pay, he stood to make a great deal of money.

Warning: if you are fond of Jell-O, you might want to stop reading here.

One of the things he found floating by was a lot of parts that, while useless for other purposes, still contained animal collagen. These parts, if heated would render a mixture of collagen which, upon cooling, would turn into a high protein gel. While this gel was already being used for glue and, to some extent, a food additive at the time, Cooper saw potential.

Discussing it with his wife, he came upon the idea to add in food coloring and fruit flavor to his collagen gel to set it apart from the rather bland gelatin sold by Knox. In 1845, Cooper patented this mixture to create what we today know as Jello-O, the refreshing desert food.

This story strikes me as relevant today. Like the processing plants of the 19th century, modern companies process an ever increasing amount of data. And like the slaughterhouses, we pour vast amounts of it into our own data lakes (Bubbly Lake, if you will). And there it sits coming us money rather than making us money.

True, some companies are beginning to use this data to create unique products. Amazon comes immediately to mind with its recommendation engines. Like Jello-O, the online retailer has taken something that others do not fully utilize and converted it into a bona fide competitive advantage by applying its own ingenuity.

Bt the vast majority of this data goes unused. there is a tremendous opportunity for a modern day Peter Cooper to turn this data into something new and valuable. I predict that we will find the data we hold to be of greater value than many of the services provided by these firms.

The question is, who among us will be the next Peter Cooper and turn the vast mountains of data that we so carefully store into something more than just insurance against regulatory challenges? What new product sits there waiting to be discovered by the Peter Cooper of modern finance?

Have you ever noticed how truly competent, intelligent people are often quiet about their ideas, while total buffoons are happy to go around shouting about their own goofy concepts? Yeah, we all have see thins play out.

This particular phenomenon is due to a cognitive bias first illustrated by Dunning and Kruger in 2009, and therefore referred to as the Dunning-Kruger Effect.

Their `1999 paper starts with a story illustrating how the incompetent often lack the skill necessary to recognize their own incompetence: In 1995, McArthur Wheeler walked into two Pittsburgh banks and robbed them in broad daylight, with no visible attempt at disguise. He was arrested later that night, less than an hour after videotapes of him taken .from surveil- lance cameras were broadcast on the 11 o'clock news. When police later showed him the surveillance tapes, Mr. Wheeler stared in incredulity. “But I wore the juice,” he mumbled. Apparently, Mr. Wheeler was under the im- pression that rubbing one's face with lemon juice rendered it invisible to videotape cameras (Fuocco, 1996). Apparently Wheeler had hear that Lemon Juice was used for invisible ink and thought it would therefore work to make his face invisible.

A couple of other cognitive biases partner together to make this worse. Attributions bias causes people to attribute bad outcomes to bad luck and good outcomes to skill. So if your business venture fails, it was because you were merely unlucky, had bad timing, etc. But if you win the lottery, it was because you had a superior system borne of a keene intellect.

The lake Woebegone Effect is named after Garrison Keillor's fictional town where "all the children are above average." If you ask a group of 100 people to rate themselves on a skill such as driving, 8-% of them will rate themselves above average. By definition no more than 50% can be above average, so 30% of these people are deluding themselves about their skill.

So in a group of people working together, the chances are good that there will be someone incompetent who believes that they are well above average, that they always make good decisions, and they will not have the self awareness or metacognition to be able to identify their own shortcomings. And here is the kicker: they will be far more confident about there own ideas and probably more vocal.

Why? because they feel smarter than everyone else and completely lack the ability to see the flaws in their own ideas!

I don't pretend to have a cure for this. But I have often wondered at why the truly talented people in an organization are often the quietest and most riddled with doubt. This explains it.

What it does suggest is that for those of us in senior management, we really must find ways to hear what the quiet people think. Allowing vociferous, confident people to dominate the conversations has a good chance of producing truly flawed plans. Confidence, it seems is not an indication of competence, but rather often, evidence of the opposite. ​

The media has been covering a remarkable story. Apparently 15 young North Sea Sperm Wales washed ashore in Germany. The news outlets have reported that they starved because their stomachs were full of plastic, including car parts.

This sounded a bit over the top to me, so I did a brief bit of research. Almost every article was the same, suggesting that the wales were literally so full of plastic that they could no longer eat. And then I found an article from oceandefenderhawaii.com (an environmentalist website, so biased, if anything, in favor of wales and against pollution.)

It states:" Four of the whales had plastic and a few other marine debris in their stomach, but most had empty stomachs, they were starved. To conclude that all whales died from plastic pollution in the ocean is not accurate in our opinion."

So the reports jumped from four out of 15 whales having plastic in their stomachs, to all 15 dying from stomachs full of plastic. Clearly that is a far more sensationalistic story.

Of course what followed were the demands that drastic action be taken to clear our oceans of all of this plastic that is filling sea creature near to bursting. And thus a risk, and a mitigation are created from whole cloth in order to save an agenda.

IF this happened only in the media, it would be one thing, but clearly this happens on a smaller scale within organizations as well. As the old saying goes, In God we trust. With all others, verify.

As the market was catching its breath after the 2008 crash, I was working at one of the largest financial institutions (great timing joining the finance industry the month it crashed). As interest rates fell, much of our income fell as well. The board and owner wondered how bad it could get, and how long it could last.

Often in life, when we comfort ourselves by saying "this can't go on forever", we find out that bad things can go infer a whole lot longer than we would think possible. Ask someone with a few toddler aged kids in potty training or in a bad marriage and they will confirm this observation.

Anyway, we started by running assumptions that we were given by senior leaders. In hindsight, all of these were naive. No one though they could go below 100 bps, and would not stay at even that level for more than a year.

However, if we ran Monte Carlo runs, we got scenarios that more closely resembled Japan (in large part because we included japanese data). But even that could not contemplate negative interest rates.

We should have considered negative rates. It was in the literature. Even Helicopter cash drops (which Japan is discussing) were there.

You see, risk management is not about drawing trend lines from the past. It is about exploring the possibility space of the future. Yes, we do fins that some possibilities are unlikely; but unlikely is very different than inconceivable.

The lesson is that good risk management - the kind that should be done and not just the wrote daily grind- goes beyond just grinding historical data through the machine; it requires broader knowledge and context. One needs to be interested in political conversations, philosophy, theory, trends, and multiple disciplines.

Rarely has "Süddeutsche Zeitung" been in such great demand in newsrooms. The exclusive story on the "Panama Papers" highlights the power as well as the impotence of journalistic work, DW's Marko Langer writes.Terabyte. Tera-byte. May I be honest with you? I'm afraid I've never "read" a Terabyte. Many books, yes. Newspapers, too, lots of them. I'm also on the internet pretty much all day. But a … Terabyte?2.6 Terabyte worth of data were leaked to "Süddeutsche Zeitung," one of Germany's leading newspapers, prior to its publication of the "Panama Papers." And it turned it into an impeccable story.I have that on the best possible authority because I've read the paper. And now all those gentlemen - Poroshenko, Putin, Mossack, or Messi, have a, well, image problem. Quite a Scoop.It's not for nothing that Stefan Plöchinger, the paper's editor-in-chief in charge of digital projects, took delight in the fact that none other than American whistleblower Edward Snowden leaked the story on Twitter prior to the deadline. Plöchinger tweeted "fun fact: Snowden has 'leaked' our leak - 12 minutes before the deadline."That's journalism in the digital age. Today, on day one after the "Panama Papers" were released to the public, we must make two basic assumptions.-Georg Mascolo, a star journalist who left Germany's "Der Spiegel" news magazine over a disagreement, will once again be proud of the research network composed of Süddeutsche and the WDR and NDR public broadcasters - he has been acting as its co-ordinator and spokesman for two years. "Der Spiegel", in turn, is having massive problems and trailing behind - just like many other major news publication outlets.-Rarely does the whole dilemma of journalistic work become more obvious than on a day like this. According to the dictionary, a 'dilemma' is defined as a 'predicament you find yourself in that forces you to choose between two equally difficult or undesirable options.' Today, the dilemma nine out of 10 news outlets face is: "Do we copy it, or do we give it a miss?"The answer is: everyone will copy it. That story is just too important. However, today virtually no journalist gets the opportunity to conduct their own in depth research into this complex and complicated issue. There is a shortage of time, money, contacts, resources. And - tomorrow there'll be another bandwagon to jump on anyway.DW's Marko LangerTherefore, I'm now going to disclose a very sad secret of our trade. That's the state of affairs, mostly. Everyone's copying from everybody else, and that's not always helpful when one strives to establish the truth.Here are some heretical questions: Has anyone been to Syria recently? Or in Pyongyang? Or just made a personal appearance at Guido Westerwelle's funeral service in Cologne's St. Aposteln church? I don't see that many fingers raised.So what's to be done? Every reporter who goes out there and sees things for him or herself is good, because he or she knows it is not about the reporter. And every medium which maintains an investigative unit driven by reporters is a good one from a journalistic point of view.That is how, in the age of globally networked data streams, you can acquire the decisive advantage which enables you to get hold of such a story in the first place, thereby leaving your competitors to reel from disappointment. So how does it work? Ask Frederik Obermaier, one of the authors of Süddeutsche's "Panama Papers" story. He tweeted "what a year of research, still all hard to grasp."Perhaps that is what German Foreign Minister Frank-Walter Steinmeier had in mind when, speaking at the LeadAwards ceremony - which honors exceptional works published in the German media - in November 2015, he demanded more diversity from us journalists.It's not a good sign at all if a top politician issues a reminder like that. For the majority of newsrooms the message is clear: Do your homework! Become more effective. The New York Times has just gone public with its account of how they covered the first couple of hours after the Brussels bombings.So, we conclude that the focus must be on substance. Reduce the waffling! Süddeutsche Zeitung - here's one final applause and cheer, dedicated to my colleagues in Munich - shows how it can be done. Excellent work! To everyone else I say, quoting satirist Kurt Tucholsky: "A bad journalist is not even a philosopher."

“Never waste any time you can spend sleeping.” ― Frank H. Knighttags: efficiency, sleep, sleeping, time, waste46 likesLike“[The]...feeling for what one should want, in contrast with actual desire, is stronger in the unthinking than in those sophisticated by education. It is the later who argues into the ‘tolerant’ (economic) attitude of de gustibus non est disputandum [in matters of taste, there can be no disputes]; the man in the street is more likely to view the individual whose tastes are ‘wrong’ as a scurvy fellow who ought to be despised if not beaten up or shot.” ― Frank H. Knight, The Ethics of Competition1 likesLike“The mathematical economists have commonly been mathematicians first and economists afterward, disposed to oversimplify the data and underestimate the divergence between their premises and facts of life.” ― Frank H. Knight, The Ethics of Competition1 likesLike“Economics, or more properly theoretical economics, is the only one of the social sciences which has aspired to the distinction of an exact science. To the extent that it is an exact science it must accept the limitations as well as share the dignity thereto pertaining, and it thus becomes like physics or mathematics in being necessarily somewhat abstract and unreal. In fact it is different from physics in degree, since, though it cannot well be made so exact, yet for special reasons it secures a moderate degree of exactness only at the cost of much greater unreality.” ― Frank H. Knight, Risk, Uncertainty, and Profit

In the discussion on air travel, he pointed out that flying has not gotten cheaper in the past 20 years and that it has become far more miserable. Speaking to risk management, he pointed out that the 9/11 attacks were not caused by improper screening or failing to take off a belt or shoes. Furthermore, he puts the lost productivity cost of the TSA check-ins at $8 billion. Add in the actual costs of employing the people and machines and one gets to some pretty big numbers.

So, safety is not improved, the risk is not mitigated, AND it costs us billions and makes life miserable.

On Wednesday morning, the full moon will enter the shadow of Earth and darken ever so slightly in a penumbral eclipse. But potentially more interesting, especially for those on the East Coast, will be a very bright Jupiter, which will accompany the moon on Tuesday night.For this eclipse, the central and western United States will be better positioned to catch the slightly — with an emphasis on slightly — darkened moon. Other parts of the world to see it include Australia, Asia and the Pacific, said noted eclipse expert Fred Espenak. Knowing about the eclipse on Wednesday morning may be more useful than seeing it — for practical purposes, the shading is so minuscule that it will be nearly indistinct from a regular full moon.In lieu of the eclipse for those on the East Coast, steep some herbal tea and venture out on Tuesday night to behold the pleasantly plump waxing moon and its planetary companion Jupiter above it in the eastern sky.Jupiter will be very bright at -2.5 magnitude, and the moon will be extremely bright at -12.4 magnitude. Jupiter reached opposition on March 8 — which means that the planet puts on a vibrant show all night long. Those lunar-planetary travel buddies cross the sky together, like a Bob Hope-Bing Crosby road picture, into the morning’s western heavens.